P R E S S R E L E A S E
| Company Contacts | IR Agency Contact | |
|
Guy Avidan, AudioCodes Tel:
+972-3-976-4000 |
Shirley
Nakar, Director, Investor Relations AudioCodes Tel: +972-3-976-4000 shirley@audiocodes.com |
Erik Knettel, Grayling Tel: +1-646-284-9415 erik.knettel@grayling.com |
AudioCodes Reports Third Quarter 2013 Results
Revenue Increased 11.7% Year-Over-Year to $35.0 Million, Driving Significant Improvements in Profitability
Lod, Israel – October 30, 2013 – AudioCodes (NasdaqGS: AUDC), a leading provider of converged voice solutions that enable enterprises and service providers to transition to all-IP voice networks, today announced financial results for the third quarter ended September 30, 2013.
Third Quarter Highlights:
| · | Revenues totaled $35.0 million, an 11.7% increase over the year ago quarter |
| · | 13.4% increase in revenues from the networking business over the year ago quarter |
| · | GAAP net income was $935,000 or $0.02 per diluted share |
| · | Non-GAAP net income was $1.8 million or $0.04 per diluted share |
| · | Net cash provided by operating activities was $1.6 million |
Revenues for the third quarter of 2013 were $35.0 million, compared to $33.7 million for the second quarter of 2013 and $31.4 million for the third quarter of 2012.
Net income in accordance with U.S. generally accepted accounting principles (GAAP) was $935,000, or $0.02 per diluted share, for the third quarter of 2013, compared to GAAP net income of $441,000, or $0.01 per diluted share, for the second quarter of 2013, and a GAAP net loss of $1.1 million, or ($0.03) per diluted share, for the third quarter of 2012.
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Non-GAAP net income for the third quarter of 2013 was $1.8 million, or $0.04 per diluted share, compared to non-GAAP net income of $1.0 million, or $0.03 per diluted share, for the second quarter of 2013, and a non-GAAP net loss of $419,000, or ($0.01) per diluted share, for the third quarter of 2012.
Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; and (ii) amortization expenses related to intangible assets. A reconciliation of net income (loss) on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.
Net cash provided by operating activities for the third quarter of 2013 totaled $1.6 million. Cash and cash equivalents, bank deposits and marketable securities were $58.0 million as of September 30, 2013 compared to $57.5 million as of June 30, 2013 and $54.1 million as of September 30, 2012.
“We are very pleased to report another quarter of growing revenues and earnings, our fifth consecutive quarter of growth and expansion in our markets for unified communications and business services,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “This series of successful quarters illustrates our ability to deliver consistent growth and success that we expect will continue in future years.”
Mr. Adlersberg continued, “In the third quarter of 2013, we made important strides with our One Voice strategic initiative to become a leader in full service, end-to-end voice solutions in our industry. Our ‘One Voice for Lync’ program announced in early 2013 has proven to be effective and successful, and has contributed to our performance in the third quarter. Early in the fourth quarter we have made further progress in the One Voice Initiative by announcing a second program, AudioCodes One Voice for Hosted Services, a program which targets the fast developing market for Hosted PBX Services and SIP Trunking for service providers’ business services market.
Overall, innovation remains the foundation of our growth strategy. Our recent demonstration of the world’s first WebRTC HD call between an internet browser and an IP phone is expected to accelerate the adoption of browser-based real-time voice and video communications. Our ability to tap these opportunities among global carrier and enterprise customers is strengthened by our robust network of international partners which is further enhancing our ability to grow.”
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Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time today to discuss the Company’s third quarter 2013 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:
United States Participants: +1 (877) 407-8031
International Participants: +1 (201) 689-8031
The conference call will also be simultaneously Web cast. Investors are invited to listen to the call live via Web cast at the AudioCodes corporate website at www.audiocodes.com.
About AudioCodes
AudioCodes Ltd. (NasdaqGS: AUDC) designs, develops and sells advanced Voice-over-IP (VoIP) and converged VoIP and Data networking products and applications to Service Providers and Enterprises. AudioCodes is a VoIP technology market leader focused on converged VoIP and data communications and its products are deployed globally in Broadband, Mobile, Enterprise networks and Cable. The Company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Routers, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers and Value Added Applications. AudioCodes’ underlying technology, VoIPerfectHD™, relies on AudioCodes’ leadership in DSP, voice coding and voice processing technologies. AudioCodes’ High Definition (HD) VoIP technologies and products provide enhanced intelligibility and a better end user communication experience in Voice communications. For more information on AudioCodes, visit http://www.audiocodes.com.
Statements concerning AudioCodes' business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular; shifts in supply and demand; market acceptance of new products and the demand for existing products; the impact of competitive products and pricing on AudioCodes' and its customers' products and markets; timely product and technology development, upgrades and the ability to manage changes in market conditions as needed; possible need for additional financing; the ability to satisfy covenants in the Company’s loan agreements; possible disruptions from acquisitions; the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes’ business; and other factors detailed in AudioCodes' filings with the U.S. Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.
©2013 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, OSN, SmartTAP, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP and 3GX are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners. Product specifications are subject to change without notice.
Summary financial data follows
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
| September 30, | December 31, | |||||||
| 2013 | 2012 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 21,598 | $ | 15,219 | ||||
| Short-term and restricted bank deposits | 9,601 | 10,330 | ||||||
| Short-term marketable securities and accrued interest | 19,345 | 7,966 | ||||||
| Trade receivables, net | 28,070 | 24,198 | ||||||
| Other receivables and prepaid expenses | 9,137 | 7,274 | ||||||
| Inventories | 13,393 | 16,797 | ||||||
| Total current assets | 101,144 | 81,784 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term and restricted bank deposits | $ | 7,479 | $ | 9,251 | ||||
| Long-term marketable securities | - | 15,762 | ||||||
| Investments in an affiliated company | - | 1,084 | ||||||
| Deferred tax assets | 3,668 | 3,565 | ||||||
| Severance pay funds | 17,765 | 15,772 | ||||||
| Total long-term assets | 28,912 | 45,434 | ||||||
| PROPERTY AND EQUIPMENT, NET | 3,303 | 3,619 | ||||||
| GOODWILL, INTANGIBLE ASSETS AND OTHER, NET | 38,340 | 34,952 | ||||||
| Total assets | $ | 171,699 | $ | 165,789 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current maturities of long-term bank loans | $ | 4,686 | $ | 8,436 | ||||
| Trade payables | 8,614 | 6,817 | ||||||
| Other payables and accrued expenses | 16,580 | 15,062 | ||||||
| Deferred revenues | 7,257 | 4,871 | ||||||
| Total current liabilities | 37,137 | 35,186 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Accrued severance pay | $ | 18,770 | $ | 16,284 | ||||
| Long-term bank loans | 11,157 | 14,477 | ||||||
| Senior convertible notes | 353 | 353 | ||||||
| Deferred revenues and other liabilities | 2,389 | 1,192 | ||||||
| Total long-term liabilities | 32,669 | 32,306 | ||||||
| Total equity | 101,893 | 98,297 | ||||||
| Total liabilities and equity | $ | 171,699 | $ | 165,789 | ||||
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues: | ||||||||||||||||
| Products | $ | 82,746 | $ | 77,581 | $ | 29,034 | $ | 25,638 | ||||||||
| Services | 18,234 | 17,103 | 5,991 | 5,725 | ||||||||||||
| Total Revenues | 100,980 | 94,684 | 35,025 | 31,363 | ||||||||||||
| Cost of revenues: | ||||||||||||||||
| Products | 38,410 | 35,758 | 13,704 | 12,065 | ||||||||||||
| Services | 4,699 | 4,436 | 1,595 | 1,486 | ||||||||||||
| Total Cost of revenues | 43,109 | 40,194 | 15,299 | 13,551 | ||||||||||||
| Gross profit | 57,871 | 54,490 | 19,726 | 17,812 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development, net | 20,994 | 22,446 | 6,714 | 7,201 | ||||||||||||
| Selling and marketing | 28,991 | 30,319 | 10,035 | 9,567 | ||||||||||||
| General and administrative | 6,408 | 6,481 | 2,292 | 2,278 | ||||||||||||
| Total operating expenses | 56,393 | 59,246 | 19,041 | 19,046 | ||||||||||||
| Operating income (loss) | 1,478 | (4,756 | ) | 685 | (1,234 | ) | ||||||||||
| Financial income, net | 151 | 366 | 273 | 231 | ||||||||||||
| Income (loss) before taxes on income | 1,629 | (4,390 | ) | 958 | (1,003 | ) | ||||||||||
| Income tax expenses, net | (161 | ) | (284 | ) | (23 | ) | (101 | ) | ||||||||
| Equity in losses of an affiliated company, net | (21 | ) | (27 | ) | - | (4 | ) | |||||||||
| Net income (loss) | $ | 1,447 | $ | (4,701 | ) | $ | 935 | $ | (1,108 | ) | ||||||
| Basic net earnings (loss) per share | $ | 0.04 | $ | (0.12 | ) | $ | 0.02 | $ | (0.03 | ) | ||||||
| Diluted net earnings (loss) per share | $ | 0.04 | $ | (0.12 | ) | $ | 0.02 | $ | (0.03 | ) | ||||||
| Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) | 38,121 | 39,523 | 38,294 | 38,673 | ||||||||||||
| Weighted average number of shares used in computing diluted net earnings (loss) per share (in thousands) | 38,854 | 39,523 | 39,332 | 38,673 | ||||||||||||
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
NON-GAAP PROFORMA STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues: | ||||||||||||||||
| Products | $ | 82,746 | $ | 77,581 | $ | 29,034 | $ | 25,638 | ||||||||
| Services | 18,234 | 17,103 | 5,991 | 5,725 | ||||||||||||
| Total Revenues | 100,980 | 94,684 | 35,025 | 31,363 | ||||||||||||
| Cost of revenues: | ||||||||||||||||
| Products | 37,882 | 35,142 | 13,470 | 11,882 | ||||||||||||
| Services | 4,584 | 4,378 | 1,547 | 1,445 | ||||||||||||
| Total Cost of revenues (1) (2) | 42,466 | 39,520 | 15,017 | 13,327 | ||||||||||||
| Gross profit | 58,514 | 55,164 | 20,008 | 18,036 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development, net (1) | 20,710 | 22,144 | 6,616 | 7,110 | ||||||||||||
| Selling and marketing (1) (2) | 28,308 | 29,707 | 9,742 | 9,342 | ||||||||||||
| General and administrative (1) | 5,984 | 6,026 | 2,142 | 2,129 | ||||||||||||
| Total operating expenses | 55,002 | 57,877 | 18,500 | 18,581 | ||||||||||||
| Operating income (loss) | 3,512 | (2,713 | ) | 1,508 | (545 | ) | ||||||||||
| Financial income, net | 151 | 366 | 273 | 231 | ||||||||||||
| Income (loss) before taxes on income | 3,663 | (2,347 | ) | 1,781 | (314 | ) | ||||||||||
| Income tax expenses, net | (161 | ) | (284 | ) | (23 | ) | (101 | ) | ||||||||
| Equity in losses of an affiliated company, net | (21 | ) | (27 | ) | - | (4 | ) | |||||||||
| Net income (loss) | $ | 3,481 | $ | (2,658 | ) | $ | 1,758 | $ | (419 | ) | ||||||
| Diluted net earnings (loss) per share | $ | 0.09 | $ | (0.07 | ) | $ | 0.04 | $ | (0.01 | ) | ||||||
| Weighted average number of shares used in computing basic net earnings (loss) per share (in thousands) | 39,185 | 39,523 | 39,712 | 38,673 | ||||||||||||
| (1) | Excluding stock-based compensation expenses related to options and restricted stock units granted to employees and others. |
| (2) | Excluding amortization of intangible assets related to the acquisitions of Nuera, Netrake, CTI Squared and Mailvision assets. |
Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
U.S. dollars in thousands, except per share data
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| GAAP net income (loss) | $ | 1,447 | $ | (4,701 | ) | $ | 935 | $ | (1,108 | ) | ||||||
| GAAP net earnings (loss) per share | $ | 0.04 | $ | (0.12 | ) | $ | 0.02 | $ | (0.03 | ) | ||||||
| Cost of revenues: | ||||||||||||||||
| Stock-based compensation (1) | 34 | 56 | 15 | 18 | ||||||||||||
| Amortization expenses (2) | 609 | 618 | 267 | 206 | ||||||||||||
| 643 | 674 | 282 | 224 | |||||||||||||
| Research and development, net: | ||||||||||||||||
| Stock-based compensation (1) | 284 | 302 | 98 | 91 | ||||||||||||
| Selling and marketing: | ||||||||||||||||
| Stock-based compensation (1) | 437 | 384 | 199 | 149 | ||||||||||||
| Amortization expenses (2) | 246 | 228 | 94 | 76 | ||||||||||||
| 683 | 612 | 293 | 225 | |||||||||||||
| General and administrative: | ||||||||||||||||
| Stock-based compensation (1) | 424 | 455 | 150 | 149 | ||||||||||||
| Non-GAAP net income (loss) | $ | 3,481 | $ | (2,658 | ) | $ | 1,758 | $ | (419 | ) | ||||||
| Non-GAAP Diluted net earnings (loss) per share | $ | 0.09 | $ | (0.07 | ) | $ | 0.04 | $ | (0.01 | ) | ||||||
| (1) | Stock-based compensation expenses related to options and restricted stock units granted to employees and others. |
| (2) | Amortization of intangible assets related to the acquisitions of Nuera, Netrake, CTI Squared and Mailvision assets. |
Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.
| Page 7 of 9 |
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| ( Unaudited) | ( Unaudited) | ( Unaudited) | ( Unaudited) | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | 1,447 | $ | (4,701 | ) | $ | 935 | $ | (1,108 | ) | ||||||
| Adjustments required to reconcile net income or loss to net cash provided by or used in operating activities: | ||||||||||||||||
| Depreciation and amortization | 2,233 | 2,136 | 854 | 735 | ||||||||||||
| Amortization of marketable securities premiums and accretion of discounts, net | 268 | 327 | 76 | 110 | ||||||||||||
| Equity in losses of an affiliated company, net | 21 | 14 | - | (9 | ) | |||||||||||
| Increase (decrease) in accrued severance pay, net | 214 | (309 | ) | 100 | (89 | ) | ||||||||||
| Stock-based compensation expenses | 1,179 | 1,197 | 462 | 407 | ||||||||||||
| Increase in accrued interest on marketable securities, bank deposits and structured notes | 115 | 5 | 63 | - | ||||||||||||
| Increase in long- term deferred tax assets | (103 | ) | - | (103 | ) | - | ||||||||||
| Decrease (increase) in trade receivables, net | (3,893 | ) | 4,205 | (1,664 | ) | 195 | ||||||||||
| Increase in other receivables and prepaid expenses | (2,663 | ) | (2,408 | ) | (1,927 | ) | (895 | ) | ||||||||
| Decrease in inventories | 3,404 | 1,683 | 73 | 838 | ||||||||||||
| Increase (decrease) in trade payables | 1,802 | (5,698 | ) | 2,337 | (462 | ) | ||||||||||
| Increase (decrease) in deferred revenues | 3,143 | 99 | (57 | ) | (844 | ) | ||||||||||
| Increase (decrease) in other payables and accrued expenses | 1,193 | (1,789 | ) | 467 | (123 | ) | ||||||||||
| Net cash provided by (used in) operating activities | 8,360 | (5,239 | ) | 1,616 | (1,245 | ) | ||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Decrease (increase) in short-term deposits, net | 729 | 730 | 998 | (959 | ) | |||||||||||
| Investment in affiliated company | (1,211 | ) | (72 | ) | - | (22 | ) | |||||||||
| Proceeds from redemption of long-term bank deposits | 1,772 | 1,590 | 460 | 600 | ||||||||||||
| Proceeds from redemption of marketable securities upon maturity | 4,000 | - | - | - | ||||||||||||
| Purchase of property and equipment | (1,063 | ) | (1,844 | ) | (390 | ) | (674 | ) | ||||||||
| Net cash provided by (used in) investing activities | 4,227 | 404 | 1,068 | (1,055 | ) | |||||||||||
| Page 8 of 9 |
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| ( Unaudited) | ( Unaudited) | ( Unaudited) | ( Unaudited) | |||||||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Purchase of treasury stock | - | (6,299 | ) | - | (2,050 | ) | ||||||||||
| Repayment of long-term bank loans | (7,070 | ) | (7,376 | ) | (1,727 | ) | (2,477 | ) | ||||||||
| Consideration related to payment of acquisition of NSC | (515 | ) | (336 | ) | - | - | ||||||||||
| Proceeds from issuance of shares upon exercise of options and warrants | 1,377 | 35 | 1,167 | - | ||||||||||||
| Net cash used in financing activities | (6,208 | ) | (13,976 | ) | (560 | ) | (4,527 | ) | ||||||||
| Increase (decrease) in cash and cash equivalents | 6,379 | (18,811 | ) | 2,124 | (6,827 | ) | ||||||||||
| Cash and cash equivalents at the beginning of the period | 15,219 | 28,257 | 19,474 | 16,273 | ||||||||||||
| Cash and cash equivalents at the end of the period | $ | 21,598 | $ | 9,446 | $ | 21,598 | $ | 9,446 | ||||||||
| Page 9 of 9 |